As the S&P 500 trades near record highs amid artificial intelligence euphoria, economist Owen Lamont’s warnings about thin summer liquidity and extreme market dispersion are coming into focus as investors enter Wall Street’s traditional “panic season.”
The Arrival of ‘Panic Season’
For most, August means vacations, but for financial markets, it marks what Acadian Asset Management portfolio manager Lamont called the “panic season” in his July 2025 newsletter. Lamont had noted that historic financial crises, including the 1929 and 1987 crashes, disproportionately cluster between August and October.
One potential culprit is the summer vacation. With traders away, liquidity thins. “Because equity markets were illiquid due to the absence of vacationing traders,” trades generate massive price impacts, Lamont explains, warning investors to “be mentally prepared for an epic financial disaster.”
A Century-Old Market Distortion
